How to cut tax on your child's student home

Parents are unfairly penalised on the flats they buy for their offspring at university. Report by Clare Francis

AN increasing number of parents are opting to buy a house for their child to live in while at university, and many are paying more tax than they need to. There are, however, nifty ways to minimise that tax bill.

If you buy a house for your son or daughter to live in, and rent the other bedrooms out to other students, you will have to pay tax on the rental income. You may also be liable for capital-gains tax (CGT) when you sell the property.

However, with careful planning you can significantly reduce the amount you have to hand the taxman, and in some instances you may be able to get out of paying altogether.

One option is to buy the property in a son or daughter’s name. The likelihood is that he or she will be a non-taxpayer. While the rental income they receive may make them liable